Economic growth

The leaders of the G20 are expected to agree on measures to support the global economy and guard against a repeat of the current crisis.

"We pledge to avoid destabilising booms and busts in asset and credit prices and adopt macro-economic policies, consistent with price stability that will promote adequate and balanced global demand," said a draft of the communique obtained by Reuters.

"We will also make decisive progress on structural reforms that foster private demand and strengthen long-run growth potential."

Speaking ahead of today's resumption of talks, Gordon Brown told Sky News: "Without concerted action there is a danger of years of low growth and low employment. But with concerted action, I believe that we can have higher growth and I believe that we can get unemployment down."

The G20 nations are expected to agree to that the $1trn "fiscal stimulus" package they agreed in London in April will remain in place until "a durable recovery is secure".

A draft of the final communique suggests that US pressure for China to start spending some of its $2trn reserves to help support the global economy has borne some fruit, as it includes a pledge from G20 members with "sustained, significant" surpluses, to "strengthen domestic sources of growth". Countries with large deficits should support private savings, it says.

Banking regulation

The G20 heads of state are hoping by 2012 to put new curbs on the activities of the world's banks so they have enough capital to cover potential losses and discourage the sorts of excessive leverage that, in the past year and a half, led several of the world's biggest names to collapse or accept emergency rescue mergers.

Banks would have to retain more of their profits to support the cash they lend.

The draft communique suggests that, after intense pressure from some European leaders, G20 will clamp down on excessive pay and bonuses within the global financial system. Possible remedies include giving companies more power to claw back bonuses if their subsequent performance suggests they are actually rewards for failure, while the percentage of revenues paid out in bonuses could also be capped where the bank in question is struggling with low reserves.

"If we all act together, financial institutions will have stricter rules for risk taking, governance that aligns compensation with long-term performance, and greater transparency in their operations," according to the draft seen by Reuters. "Major failures of regulation and supervision, plus reckless and irresponsible risk-taking by banks and other financial institutions, created dangerous financial fragilities that contributed significantly to the current crisis.

"Reforming compensation policies and practices is an essential part of our effort to increase financial stability."

There has been fierce debate within the G20 about curbs on excessive pay, with Angela Merkel, the German chancellor, warning that the G20 summit must not be diverted from a clampdown, while Obama and Brown have been more reticent about setting specific limits on pay, opting instead to recommend that banks without enough capital be required to claw back bonuses.

Fossil fuels

Environmental campaigners are likely to be disappointed that while the draft of the G20 agreement endorses the phasing out of subsidies for fossil fuels there is no deadline, only a promise to do it in the "medium term".

Several countries, such as India and China, give financial incentives either in the form of tax breaks or cash payments to companies producing fossil fuels including coal that are major contributors to climate change.

Dumping subsidies could cut global warming by 10% by 2050, according to figures form the International Energy Agency and the Organisation for Economic Co-operation and Development (OECD) in the draft. The G20 will discuss possible ways of phasing out subsidies at their next meeting.

G20 leaders will agree to investigate ways of providing financial help to countries threatened by climate change, according to the draft, and "intensify our efforts" to reach a UN climate change agreement at the upcoming talks in Copenhagen.

International trade and aid

Aid agencies will heavily scrutinise a proposal to charge the World Bank with the job of creating a "multilateral trust fund" to increase agricultural investment in poor countries. The G20 will call for a review of the needs of the bank by the first half of next year to see whether it has the resources needed to help developing nations through the economic turmoil.

"Over 4 billion people remain under-educated, ill-equipped with capital and technology and insufficiently integrated into the global economy," according to the draft. "We need to work together to make the policy and institutional changes needed to accelerate the convergence of living standards and productivity in developing and emerging economies to the levels of the advanced economies."

The draft communique pledges the G20 nations to move as "quickly as possible" to reach a settlement in long-running world trade talks that began in 2001. The so-called Doha round has dragged on without any agreement on the critical issues such as reducing farm subsidies, which distort international trade, with the European Union and South American nations calling for faster action and the US dragging its feet.

The draft communique calls on the G20 to fight protectionism, a promise that will ring hollow for many campaigners as Obama this month introduced a 35% levy on imports of Chinese tyres.

IMF reform

The G20 leaders are believed to be close to a deal that would dramatically change the operation of the International Monetary Fund, giving more voting power to some developing countries, although the draft communique does not include any mention of the fund. Voting power on the 24-person IMF board reflects the loans that each member makes to the fund, calculated based on their share of the global economy.

That model owes a lot to the fund's foundation in the wake of the second world war and is skewed towards Europe and the US. As a result emerging markets are under-represented – just two directors speak for 43 African countries. The US wants the number of directors reduced. France and the UK in particular are worried they could lose their individual seats, and want to see an end to the effective veto that the US has because of its voting weight in decision-making.

Under plans being discussed at the G20 today, the world's rich nations would surrender up to 5% of their voting rights to emerging economies such as China – which currently has only 3.7% of the vote in the IMF.